October 2018 Dividend Income: To DRIP or Not to DRIP

I have a list of future blog titles for this particular series.  They aren't set up for specific months, rather for buying certain companies or hitting certain milestones.  The title for this very post was included among them.  Come to find out that it's already taken.  I suppose it's a common enough concept for a title, but it's still vexing.

In any event, as noted in last month's report, there wasn't any apparent QoQ growth.  The same three companies that paid me then paid me the same amount now.

Best Buy: $3.15
Armanino: $0.14
Barnes and Noble: $2.85

For a total of $6.14.

I said before that there was no apparent growth.  Thankfully, my 401K paid me $.07 this month, bringing the total up to $6.21.  It isn't huge growth, but I'll take it, regardless.

As far as interest income goes, this month brought in $1.10.  A lot of that is due to the IRA CD.  It's a shame I can't pump more money into that account, but that's the downside of a CD.  On top of that, the bank site shows you what the final balance is going to be at the end of the term.  It kind of takes the fun out of it, but oh well.

On other fronts, this month's stock purchase added 2 shares of Hormel to the portfolio.  You know them, they make chili, as well as a few other things.

We should probably talk about the DRIP thing, right?  It is in the title.  DRIP is the shorthand term used to describe having your dividend payments automatically reinvest into the company from which the dividend came.

So, I've been going back and forth on this.  A lot of investors swear by its power, citing it as the third leg in the dividend investing tripod (along with new capital and dividend increases).

Despite this, I was skeptical.  It seemed counter-intuitive.  Honestly, DRIP seems like it makes more sense if you're investing for market value.  You're getting "free" shares that you can sell when the stock hits a decent price.

If the goal is to build up income, turning the income down doesn't seem like it helps.  Yeah you get more shares, but you're not seeing the income anyway so there's no change there.

My original plan was to sort of split the difference and DRIP a company stock at every tenth purchase.  I pulled an audible, though and just decided to DRIP every company that I could (basically everything but Armanino and Best Buy.)

Why the change?  Well, for one thing, the dividends aren't that substantial at this point.  It's not like I'm drawing money from the account to pay bills.  On the contrary, I'm aiming to pump more money in.  In the meantime, I figure I might as well put that money to use and add fuel to the FIRE, as it were.

On top of that, as I noted before, trade commission fees are a killer and this bypasses that.  It, along with fractional shares, is one of the major selling points of the system.

I'm also behind schedule on this front, so hopefully, having those dividends go into growing my portfolio will help move things along so that I can get back up to speed.

With online trading, turning the DRIP on and off is quite easy, so should the time come when I do need that income, I can adjust it accordingly with little hassle.

In the meantime, though, I did get about a half a share of Barnes and Noble added as a result, so my forward income did get a boost...sort of, but I'll get to that in next month's post.

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September Dividend Income: Eye Arrrr Eeeey

Much like the enemy's gate, September is down, in more ways than one.  After two months of fairly respectable dividend payouts that even had an upward trajectory, this month sees us plummet back down into the realm of pocket change.

Dividend income clocked in at only 84 cents this month.  As it did when this series first started, Flowers Foods brought in 36 cents of dividends.

Thank God I bought that Kroger stock.  For a while, I was legitimately worried that I would see no QoQ (quarter over quarter) growth (pretty sure that's going to happen with next month's report sadly but at least I got to delay it.)  Thankfully, with the grocery chain feeding me 42 cents and the 401K throwing in another 6, I can announce over 100% growth! Woo!!!

....

These numbers are so small that that figure means nothing, but woo!!!

On other fronts, this was a fairly eventful month.  Following on the heels of my 401K getting up and running, I opened a Roth IRA.  Well, a Roth IRA CD to be more specific.  Capital One has these retirement accounts that offer the tax benefits of IRA's, but rather than be tied to the market, they are FDIC insured and have the same interest rate as their normal accounts.  I went ahead and tucked some money aside in a 5 year account.  On the plus side, it'll help get me closer to my retirement savings goals, the downside is that I can't put any new money in.

Thankfully, to that end, Capital One automatically opened up a Roth IRA savings account to go with it.  Same deal here, tax benefits of a Roth and the same interest rate as a savings account.  I highly doubt I'll be able to "max out" my contributions at this point.  At the very least, it gives me some sense of proactive control and another nest egg to build. In any event, putting in the full $5,500 is a nice goal to shoot for in the years to come.

I also made two stock purchases this month.

The first (planned) one was Paychex (PAYX).  They do payroll and human resource type stuff for businesses.  My uncle name dropped this company at some point a while back, specifically mentioning the dividend.  It stuck in my head ever since and I figured I might as well add it to my portfolio.  Besides, that name bodes well, yes? I bought two shares, boosting my forward income by $2.24

The second purchase was a bit more impromptu.  There are times where I respond to a bothersome day at work by buying some stock.  It's not the best response, trade commission fees are a killer and I only have so much in the brokerage account.  Still, it's fun to occasionally scratch that itch and lay the groundwork for a brighter future.  With the IRA open, I now have another option, which should mitigate this problem to a certain extent.

I bought three shares of stock in Wendy's (WEN).  I picked this because I like the food, it was easy on the budget, and it was on my list of stocks to buy anyway.  It only added $1.04 to my forward income, but every little bit counts, right?  On the plus side, they pay on this quarter, so I've already got more QoQ growth locked in for this set.

As far as interest payments go, they came close to passing the dividend total, but fell just short at 73 cents.  With the CD open and me pumping more capital into the various accounts, we should be able to cross the dollar mark in fairly short order.  We'll see how things play out, though.

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August 2018 Dividend Income: 401 Que?

Thus another month comes to an end.  It's weird to think that 2018 is coming to a close, but I am getting pretty pumped for 2019.  Stuff is on the horizon and I have a feeling it's going to be a good year. 

In the meantime, however, let's look at the last month. 

I pulled in a whopping $6.83 in dividends.  That's an all time high!  I'm kind of being facetious here, but I'm quite pleased with the numbers so far. 

Omega Healthcare Investors (OHI) paid out $1.98.

Sprague Resources LP (SRLP) paid out $3.34.

And Hi-Crush rounded it out with $1.50.

Speaking of Hi-Crush, this month's purchase added a few more shares of said company to my portfolio.  It brought my forward income to just under $60. 

Unlike the other purchases, I don't really have any personal knowledge of these companies.  They popped up more than once as I roamed various investing blogs and figured it couldn't hurt to add them to my own portfolio. The dividend payouts are actually quite solid and the stocks aren't terribly expensive.  The downside is that this gives them a high yield, which is apparently not what you want. 

I don't think these companies are bombing out or anything, but generally (from what I've read) the lower dividend yields are more stable investments.  It's good to know going forward, but at the same time, I'm not disappointed with the numbers as of yet.

As far as interest income goes, it's up to $.65  There was some growth, but not as much as I would like.  That's largely due to shorter work hours in July hindering my ability to infuse new capital. Hopefully, I'll be able to pick up the slack in the months to come. 

I think the biggest development for me this month was the activation of my 401K at one of my jobs.  The company does match some of your contribution, but I'm not eligible for that just yet.  As such, I'm just putting money in as a way to get the ball rolling.  The company tops you out at 10% of  your income, so naturally that's how much I'm putting in every week.  I've got some ground to make up on the retirement savings front, so hopefully that will help get me back on track. Added bonus, it already paid me a penny in dividends (for those of you who did the math and noticed the discrepancy.)  Not off to a bad start, all things considered.

It feels good, though.  Things are coming together and I'm seeing some pretty good momentum.  We've still got four months left in the year and, like I said, 2019 has a lot of awesome things in store.  This is gonna be fun. 

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July 2018 Dividend Income: Freddy Kroger

This month was a much more impressive showing.  I pulled in $6.14 from dividends.  This is largely due to the fact that I had more companies paying me this month.

Best Buy carried the lion's share of the weight, delivering $3.15 of the dividend income.  This is one of the few stocks that I had prior to launching this investing endeavor.  I bought the few shares I had back in high school and just held onto it.  I remember when I first started, the checks were like 96 cents, which was more amusing than anything else.  It's not exactly big money now, but dividend increases (and a split if I recall correctly) over the years have helped make it a more worthwhile hold.

Barnes and Noble (BKS) acted as a strong secondary, bringing in $2.85.  As noted in last month's entry, this was the company that really got the ball rolling.  The price is low, it pays a solid dividend, I love shopping/browsing there, and we need book stores.  We already lost Borders, so this has a nice balance in terms of reasons for me to invest.

Pulling up the rear is Armanino Foods (AMNF) with.....$0.14.  Yeah, this one isn't a big payer, but they make Italian food, which I like.  I learned of it from the Dividend Diplomats, one of whom also bought into the company.  The dividend isn't great, but the stock price is easy on the wallet and the company does have a personal connection to me as well.  Apparently, they also have decent numbers for a small company.  I'm not well versed in that aspect of investing, but I deferred to the Diplomats on that front.     

As far as interest income goes, I pulled in $0.58 cents.  It's not a bad jump from last month, at least I don't think so, but dividends do seem to be delivering the better return.  Still, I do intend to keep pumping more capital into those accounts at every opportunity to get that number higher.  No reason not to, really.

On a somewhat related note, I closed out July/kicked off August with a stock purchase.  As the title of the post would suggest, the purchase was Kroger (Kr).  I actually used to work for Dillon's, which fell under Kroger's umbrella.  It's a solid brand, as evidenced by the fact that the name has popped up on other DGI investor portfolios, and the purchase did add about $2.00 to my forward income (the amount in dividends an investor is projected to make over the next 12 months).  It's not a big increase, but the steps don't have to be large, they just have to be in the right direction, right?

That about wraps things up for this month.  I'm pleased with the results and I'm definitely looking forward to pushing ahead.  With the return of the snowbirds looming, I'm planning on sparking some significant growth in the months to come.  It should be fun.

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June 2018 Dividend Income: Humble Beginnings

So, a few months back I stumbled upon a series of blogs by dividend growth investors, people who invest in the stock market as a way to build passive income through dividend paying companies.  I was never much of a stock guy, I preferred to keep my money in the bank where I could see it and know that if it went away, it was because I spent it.  Seeing the numbers some of these guys were pulling in, however, inspired me to jump in and get a piece of the action.  I'm sure I'm quite late to the game, but better late than never, right?

These aforementioned bloggers use their sites to post and track their progress.  Not only have they built something of a community, but it motivates them to go further.  On top of that, it's just interesting and fun.  As such, I thought I'd add similar content to my own library and chronicle my own investing journey.

So, how much did I make in my initial outing?  Well, Flowers Foods (FLO) paid me a whopping.  Thirty.  Six.   Cents.

Isn't it amazing how much money you can make by getting in the stock market? Pretty soon I'll be able to buy a candy bar, you guys!

We can joke, but honestly, I think it's important to see this.  This isn't an "I had a few thousand dollars lying around so I was able to build an awesome portfolio in the span of a couple of months" situation (it's a trap a lot of the investing blogs I've read fall in to in all honesty.) We're very much in the "box of scraps" phase at this point. 

But, 2,5,10 years down the line when those numbers do become more impressive, you'll be able to look back and see where it all started.  It might even motivate a reader or two to try and follow suit.  They can see that investing in stock isn't just the purview of the wealthy.  Yeah, some companies' stocks are really expensive, but that's not the case for all.  Flowers stock, for example, is pretty cheap, going for about $20 a share.  Heck, Barnes and Noble (the company that I first invested in to launch my "career" as a DGI) is going for 5-6 bucks a share.

It should also be noted that this income figure comes close to matching what I made in bank interest, $0.42, that month.  Most of that came from my online Capital One accounts, which pay a much higher interest rate than the standard "brick and mortar" banks, and had significantly more money put into them than my Flowers investment did.  So,while the number is comically small, it shouldn't be so quickly dismissed.

So, yeah, that's the June report.  I think this is gonna be fun.

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